Finances for Real Life

Item 5 Fees and Compensation
Portfolio Management Services
Our charges for portfolio management services is based on a percentage of the value of your assets in
your account. The following is an example of our annual account charge schedule - please see your
advisory contract for your exact fee schedule as our charges are negotiable at the firm's discretion:

                                     Annual Account Fee Schedule

            Assets Under Management                                        Annual Fee
               Less than $500,000                                            1.25%

               $500,000 - $1,000,000                                           1.0%

                 Above $1,000,000                                                 0.9%

Our clients pay an annualized fee ("Account Fee") for services rendered by us and by LPL Financial.
The Account Fee is based on the value of the assets in the account, including cash holdings, and is
billable quarterly in advance. For purposes of calculating Account Fees and providing quarterly
performance reports, the initial Account Fee is due at the beginning of the quarter following inception
(account inception is the date a platform's minimum investment has been met) and will include the
prorated fee for the initial quarter in addition to the standard quarterly fee for the upcoming quarter. For
all platforms, subsequent Account Fee payments are due and will be assessed at the beginning of
each quarter based on the account value as of the close of business on the last business day of the
preceding quarter. Additional deposits and withdrawals will be added or subtracted from portfolio
assets on a prorated basis to adjust the Account Fee.

Initial Billing Example Assumptions
     • Account Fee 1.75%
     • Initial Deposit: $100,000
     • Initial Deposit Date: 06/14/2016
     • Quarter-End Value: $105,000
     • Quarter-End Date: 06/30/2016

The initial fee in this example will account for arrears and advanced billings.

Arrears Billing
Arrears billing is a necessary adjustment that charges an account for assets deposited before a fee is
assessed because advisory accounts are typically billed in advance. In this example, the account was

funded with $100,000 on June 14 and the account's quarter ends on June 30. To calculate arrears
billing the number of days the initial deposit has been in the account must be determined. The initial
deposit for this example has been in the account for 17 days.

Calculations are as follows:
[Initial Deposit x Advisory Account Fee] / 360 x Prorated Days = Arrears Billing [$100,000 x 1.75%] /
360 x 17 = $82.64

Advanced Billing
Advanced billing is done on a quarterly basis and is the primary way Account Fees are assessed to
advisory accounts. In this example, the account's quarter end value of $105,000 was taken on June
30th. To calculate advanced billing LPL Financial assumes a 360 day year and quarters lasting 90
days.

Calculations are as follows:
[Quarter End Value x Advisory Account Fee] / 360 x 90 Days = Advance Billing [$105,000 x 1.75%] /
360 x 90 = $459.38

Total Initial Billing
Arrears Billing + Advanced Billing = Total Initial Billing $82.64 + $459.38 = $542.02

Subsequent Billing Example Assumptions
   • Account Fee 1.75% Fee Cycle 3
   • Deposit: $100,000
   • Deposit Date: 10/15/2016
   • Withdrawal: $50,000
   • Withdrawal Date: 11/20/2016
   • Deposit: $25,000
   • Deposit Date: 12/25/2016
   • Quarter-End Value: $300,000
   • Quarter-End Date 12/31/2016

The subsequent billing in this example will account for the advanced billing and make adjustments for
deposits and withdrawals made during the quarter.

Advanced Billing
Advanced billing is done on a quarterly basis and is the primary way Account Fees are assessed to
advisory accounts. In this example, the account's quarter end value is $300,000 as of December 31.
To calculate advanced billing LPL Financial assumes a 360-day year and quarters lasting 90 days.

Calculations are as follows:
[Quarter-End Value x Advisory Account Fee] / 360 x 90 Days = Advance Billing [$300,000 x 1.75%] /
360 x 90 = $1,312.50

Quarterly Billing Adjustment
Quarterly billing adjustments account for any deposits or withdrawals made during the quarter. These
adjustments ensure the client is only being charged for assets which have resided in their account over
time. In this example, the account had a $100,000 deposit on October 15, $50,000 withdrawal on
November 20, and a $25,000 deposit on December 25. To calculate the billing adjustments, the
number of days each deposit and withdrawal was in the account must be determined. The number of
days for each deposit and withdrawal in this example are as follows; first deposit: 78 days, second
deposit 7 days, and the withdrawal 42 days.

Calculations are as follows:
    • [Deposit or Withdrawal x Advisory Account Fee] / 360 x Prorated Days = Billing Adjustment
       10/15 Deposit: [$100,000 x 1.75%] / 360 x 78 = $379.17
    • 11/20 Withdrawal: [– $50,000 x 1.75%] / 360 x 42 = – $102.08
    • 12/25 Deposit: [$25,000 x 1.75%] / 360 x 7 = $8.51
    • Total Billing Adjustments = $379.17 – $102.08 + $8.51 = $285.60

Total Subsequent Billing
Advanced Billing + Total Billing Adjustments = Total Subsequent Billing = $1,312.50

If the portfolio management agreement is executed at any time other than the first day of a calendar
quarter, our fees will apply on a pro rata basis, which means that the advisory fee is payable in
proportion to the number of days in the quarter for which you are a client. Our advisory fee is
negotiable, depending on individual client circumstances.

At our firm's discretion, we may combine the account values of family members living in the same
household to determine the applicable advisory account charge. For example, we may combine
account values for you and your minor children, joint accounts with your spouse, and other types of
...

Item 7 Types of Clients
We offer investment advisory services to individuals including high net worth individuals.

We have no requirements for opening or maintaining an account with our firm including, but not limited
to, a minimum dollar amount.